TOP NEWS

Tuesday, August 5, 2008

Interview with Minard Hamilton, Six Degree Games

Story by Benjamin F. Kuo

Today, Marina Del Rey-based Six Degree Games (www.sixdegreegames.com) announced their Series A funding from Prism VentureWorks and Clearstone Ventures. Minard Hamilton, the firm's CEO, founded the company with fellow JAMDAT Mobile executive Ben Jones. We spoke with Minard to learn a bit more about the company, the founders' experience at JAMDAT, and what Six Degrees hopes to do with its sport-themed virtual world for six to 14 year olds.

What's the story behind Six Degree Games?

Minard Hamilton: Both I and my co-founder, Ben Jones worked at JAMDAT, the mobile games company. Coming out of JAMDAT, we both wanted to work together, felt we had a common sensibility, and wanted to do something in the game industry. We felt like there was lots of growth there, and lots of opportunities to leverage the distribution experience we had at JAMDAT. JAMDAT was a success for many reasons, but the main one was the ability to take games, and leverage them very effectively into distribution channels. At that time, those channels were Sprint, Verizon, ATT, and T-Mobile. You had to push to get into the top deck placement, which meant a combination of being aggressive in deals, and what brands you licensed to put with your games. We felt that there was a lot of similarities with that approach to what could be applied to the online game sector. To us, the similarity is that there are lots of online game sites, who are kind of competing against each other for users and products. We felt if we had a strong product--and we're definitely developing a strong product here--you are able to leverage that strong placement into distribution channels, get deck placement, and preferential rev share in the mobile industry.

Why did you decide virtual worlds was the right place to focus on?

Minard Hamilton: We were first thinking just online games. The one thing that was good, and bad, about mobile is that you have a big intermediary--the cell phone carrier. They're key to your success. You have to have a good product, but you've also got to leverage that through a distribution channel. If you and the carrier don't have a relationship, you might have the best game, but won't sell anything, and you won't get deck placement. That's a little similar to online. Most people find you through big game portals, such as Yahoo, MSN, or AOL. Or, through big game aggregators, like Addicting, or Miniclip. Those are the intermediaries here. As we looked at the business model, we saw that those intermediaries take a pretty big chunk of revenue. Trying to think of the best ways to be positioned beneficially in that market, we came to the conclusion that you need to create a destination. That's the one way you can start to have leverage against the big intermediaries--if people are coming directly to you. The high risk, but most cost effective way to do this is to create a virtual world.

That world is sports themed?

Minard Hamilton: Yes, it's a sports themed virtual world. Again, we looked at the market, and looked for underserved sectors, and we didn't see sports as the underpinning of any strategy. Before JAMDAT, I worked at ESPN and ESPN.com for six years, so I have a good understanding of the potential players out there in the sports business, so I felt that this was an opportunity worth pursuing.

Speaking of JAMDAT, how did you go from being at ESPN to a mobile games company?

Minard Hamilton: I joined JAMDAT in 2001, and at that time I worked at ESPN International and ESPN.com. I was focused on outside the U.S. In 2001, they were seeing success in mobile from Europe and Asia, because those markets developed earlier, and I actually thought I wasn't going to get the job at JAMDAT because of what I said in one interview. I told them that JAMDAT should not look to build in Europe or Asia, but should focus on the U.S. That resonated with the folks who were looking to hire me. My thinking came out of the work I did at ESPN and ESPN.com. Building a business outside of the U.S., when you are a U.S. company is really hard. It takes a lot more resources than you can imagine. On the other hand, you have the U.S. market with 300 million, fairly wealthy people willing to spend money pretty aggressively. I got in the door at JAMDAT because of my international experience, told them I was happy to run international, but also told them if that's all you want me to do don't give me the job. I felt the opportunity was in the U.S., where they're no cultural barriers to business and the market was just starting to build--and to sell as the local player. That's what we did.

What's your view of mobile and the decision to not focus there first for Six Degrees?

Minard Hamilton: There are always going to be opportunities in mobile, but it's a resource intensive business. If you build a product for mobile, you have to port your product across literally hundreds of handsets for different manufacturers. It's very expensive to do, and you've got to have the infrastructure to do it. When Ben and I were thinking about starting a company, we looked at online because with online, you can build one version of the game. You need to tweak it for different browsers, but you don't have to port it everywhere to launch it. Mobile is an opportunity, which we are aware of from our background, but we have to be bigger and have more traction before we think to do anything in mobile.

What's business model for the site -- subscriptions, or advertising?

Minard Hamilton: Subscriptions. Our thinking is the Internet is a place where parents have concerns about where the younger demographic is going. If you build a safe destination, we believe parents are willing to pay for it. It will be based primarily on subscriptions, which we will sell based on the messaging of safety and accessibility to parents. The product will be browser based, so there is no big download and no executable that runs on a hard drive, which we think is important for the market we're pursuing. When you've got mom looking at the computer, a "click here to download" link scares a fair number of people off. The service is going to be moderated, and if there are any issues, there are people who are going to be able to step in and address those in real time. Ultimately, I think that there is a sponsor element down the road, but the first that matter is the safety and security for the site to be successful.

Having done this before at JAMDAT, what lessons did you learn there?

Minard Hamilton: It might be corny, but I had the highest regard for the team at JAMDAT. The senior executives were all adaptable, and weren't very egotistical as a rule. Ben and I have put together a great team here at Six Degrees. We've hired a guy named David Ortiz, who was a senior producer on EA's Madden product. We've got Mark Koerner, from Naughty Dog, who is our creative director. Naughty Dog did a pretty good job of creating big, original IP worth a lot of money, and we like Mark for that. Tim DaRosa, recently joined us from Midway, and is a very talented and hungry marketing exec. Our CTO, Joe Bose, came from JAMDAT. What I like about all these guys, beside being strong in their respective areas--is, most importantly, in my opinion--that they're quite adaptable. The one thing you need to do when you start any company, is to be able to look at the feedback you're getting from the market, and change your business according to that feedback. That's what we did at JAMDAT. Even though those six years seemed like a smooth trajectory, every week, we were listening to what we were hearing, what feedback we were getting, and adjusting to better or bigger opportunities, or figuring ways around insurmountable obstacles to what we thought would be a no-brainer. We've looked to create the same skill set here at Six Degree Games, with guys who are very open to feedback they get and be able to shift what we're doing and be more precise about the opportunity before us.

Finally, are there any specific sports your virtual world will focus on?

Minard Hamilton: It will be all of the big sports. You'll have to keep your ears open and eyes peeled for the product announcements as we get closer to launch. That's when we'll lay out the specifics of what we're doing.